All VyStar Offices will be Closed on February 18, 2019, Presidents' Day.
By: Akin Agar, Chief Information Officer, VyStar Credit Union
Technology companies around the globe are moving into the financial services industry by implementing the latest cutting-edge technology in banking. Most of these companies are small startups, but big tech companies and traditional financial institutions are also participating. These companies comprise the industry known as FinTech.
Each year, FinTech brings innovation to early adopting consumers. Many innovative ideas will fizzle out before reaching maturity, but those that do succeed will prove to be either sustaining opportunities or disruptive threats. Sustaining innovations provide opportunities for industry players to deliver enhanced services and products to consumers, while disruptive innovations can threaten the very existence of even the most dominant companies.
Take the video rental chain Blockbuster, for example. Already the dominant VHS rental store, Blockbuster experienced a sustaining opportunity with the release of DVDs. This technology innovation offered consumers improved video and audio quality and, best of all, no need to rewind. A few years later, Blockbuster experienced a disruptive innovation from the video streaming service Netflix. Ultimately, this disruptive innovation led to Netflix converting a critical mass of Blockbuster’s longtime customers.
What we have seen is that FinTech is driving incremental innovation that benefits you as a consumer. For example, financial institutions have fared well through a few sustaining innovations in the not-so-distant past, including ATMs, Internet banking, and most recently, mobile banking. These innovations have brought new levels of convenience for consumers and substantial cost savings for credit unions. Consumers can now access frequently used services directly from their phones at any time of day. Many of these services were historically only available at branches during business hours.
Sustaining innovations like these could prove to be problematic for any financial institution failing to adopt soon enough to meet consumer demand. As such, VyStar strives to keep a watchful eye on the developments in FinTech, looking to balance adoption with members’ expectations and demands. From this perspective, FinTech is helping drive innovation in the industry, and as a member you stand to benefit if you choose to use these services. Our technology staff continues to work with our FinTech partners to improve services we provide through our Internet & Mobile Banking solutions. This type of partnership between VyStar and FinTech ensures that our members receive the highest level of service, security and convenience available, while continually evolving and innovating. Unfortunately, FinTech can also create some confusion and additional complexity in an already complex landscape. This is because, for most financial services products, there are dozens of FinTech startups that are competing to offer that same product but with a more innovative delivery. As such, consumers can be intimidated by the vast array of options, leaving them wondering which one is the safest, which one is the most economical, and which one works well with the other.
Further, to construct a complete suite of financial services using FinTech, one might need to use a half-dozen or more mobile apps. For example, to send money to a friend, consumers have multiple FinTech options, including Venmo, Square Cash, PayPal, etc. Your group of friends might even span all three of these providers, requiring you to use all three of their apps for the same person-to-person payment. Additionally, many of the FinTech companies are not regulated to the same degree as banks and credit unions, potentially leaving consumers at risk of financial losses.
At VyStar, we strive to be your one-stop shop for all your financial needs, providing all the conveniences and innovative solutions that are available in the marketplace, while also ensuring safety and soundness. For example, we will soon be offering a new way to send money to your friends near real time via your mobile phone, free of charge. Also, our recently launched Card Control App provides real-time alerts on your purchases and gives you the ability to turn your debit card on or off. The alerts can be based on transaction amount, location, and merchant or transaction type, making it easy to keep a close eye on how your account is used. Plus, you can set spending limits on your card, which is a great tool for parents, business owners or anyone who simply wants to stick to a budget.
One of the things FinTech companies are unable to offer is the ability to walk into a conveniently located branch and discuss your financial needs with a highly skilled staff. VyStar is proud of the branch network we have built, and we continue to expand our locations. We also continue to upgrade the technologies provided in our branches: In the coming months, you will start seeing enhancements at our existing branches to encompass the latest technologies we have already been rolling out in our newer branches.
We are very excited about the new possibilities FinTech companies unlock as they blaze a trail through the technology frontier. We look forward to making the most of each new sustaining innovation that enables new services and increased convenience for our members.
Thank you for your membership, and we look forward to serving you.
Chief Information Officer
VyStar Credit Union